Student Loans

Government-sponsored student loans are an important element of many financial aid packages. These loans provide significant funding, usually with low-­interest rates and generous repayment time frames. All application requirements and loan specifications will be disclosed as part of your financial aid package.

Loan Types Links

Federal Direct Student Loan

The Federal Direct Student Loan is a federally sponsored education loan available to undergraduate students.

• Interest Rate: For loans disbursed between July 1, 2025, and June 30, 2026, the fixed interest rate is 6.39%.

• Fees: A net origination fee of 1.057% is deducted from the loan amount by the U.S. Government.

• Subsidized vs. Unsubsidized: * Subsidized: The U.S. Government pays the interest while the student is enrolled in a degree-seeking program at least half-time (1.63 units or more).

  • Unsubsidized: The student is responsible for interest from the time the loan is disbursed.

• Loan Proration (Effective July 1, 2026): Under federal regulations, loan amounts are now prorated based on "enrollment intensity."

  • Full-time status for federal lending is defined as 3.25 units or more.

  • Students enrolled in fewer than 3.25 units will have their annual loan eligibility reduced proportionally.

  • Undergraduate students completing their degree requirements in a single term (e.g., graduating after the Fall term) will also have their loan eligibility prorated regardless of unit load.

• Repayment: Loans enter repayment six months after the student graduates or drops below half-time enrollment (less than 1.63 units).

• Repayment Options: Borrowers can utilize the Standard 10-year repayment plan or the Repayment Assistance Plan (RAP). There is no penalty for early payoff.

Promissory Note and Entrance Counseling Requirements for Federal Direct Loans

To receive a Federal Direct loan, you will need to complete an online Master Promissory Note (using your FSA ID) and an Entrance Interview session. Ohio Wesleyan is a participant in the Online Student Loan Entrance Counseling service provided by the Department of Education. This service enables participants to complete entrance counseling requirements anytime on the website. The purpose of these sessions is to help you understand your rights and obligations as a student loan borrower. Click the link above to go to the Federal Direct Loan website. Once on the site, go to the Manage My Direct Loans section to complete a Federal Direct loan promissory note and entrance counseling requirements.

Exit Counseling Requirements for Federal Direct Loans

Ohio Wesleyan is a participant in an Online Student Loan Exit Counseling service. The federal government requires that students complete student loan exit counseling prior to graduating or ceasing at least half­-time attendance. This service enables participants to complete exit counseling requirements anytime on the website. The purpose of these sessions is to help you understand your rights and obligations as a student loan borrower. Click the link above and follow the instructions at the site to complete the Federal Direct loan exit counseling requirement.

Federal Direct Parent Loan (PLUS)

The Federal Direct PLUS loan is a federally sponsored education loan for parents of dependent undergraduate students.

Loan Terms & Costs

• Interest Rate: A fixed interest rate of 8.94% (for loans disbursed between July 1, 2025, and June 30, 2026).
• Origination fee: A net of 4.228% is deducted from the loan amount at the time of disbursement.

Borrowing Limits

Effective July 1, 2026, new federal regulations have introduced specific borrowing limits for the Parent PLUS program:

• Annual Limit: New parent borrowers may borrow up to $20,000 per academic year per dependent student.
• Aggregate Limit: The total (lifetime) borrowing limit is capped at $65,000 per dependent student.
• Legacy Provision (Grandfathering): If you or your student received a Federal Direct Loan disbursement (Student or Parent PLUS) before July 1, 2026, you may be eligible to continue borrowing up to the full Cost of Attendance (less other aid) under previous rules. This grandfathered status typically applies for up to three additional academic years or until the student completes their current program of study, whichever is sooner, provided the student remains continuously enrolled in that same program.

Repayment & Application

These loans typically go into repayment 60 days after full disbursement, but parents may delay repayment while the student is enrolled at least half-time with an approved Direct PLUS forbearance. The standard repayment period is 10 years, with no penalty for early payoff.

To apply:

1. Submit the Free Application for Federal Student Aid (FAFSA) to Ohio Wesleyan.

2. Complete the online application (credit check) and Master Promissory Note (MPN) at the Federal Student Aid website.

3. Once on the site, navigate to the Parent Tab and click on the "I want to help my child pay for college" section to begin.

Summary of Key Changes 

Additional Information on Government Loans

• The total subsidized and unsubsidized amount cannot exceed $5,500 for freshmen or $9,500 for independent students.
• First-­time borrowers need to complete an entrance interview and complete a promissory note before receiving any disbursements through this program.
• All borrowers must complete an exit interview when they cease attendance or drop below half-time.

Important Information Regarding Federal Direct Student Loans

Students must be enrolled in a degree-seeking program at least half-­time (2.0 units) per semester during the academic year and summer to be eligible to borrow the Federal Direct Loan. It is important during the academic year to notify the Registrar's Office if a student drops below 2.0 units or withdraws from Ohio Wesleyan University.

Students are obligated to repay their loans even if they do not complete their program of study or do not complete the program within the regular time for program completion, are unable to obtain employment, or are dissatisfied with the school or education received.

Students may be eligible to reduce their taxable income by up to $2,500 for interest paid during the tax year on their student loans. To determine eligibility, consult a qualified tax advisor or the Internal Revenue Service online or at 800-829­-1040.

Private Student Loans

Private student loans help bridge the gap between the actual cost of education and the limited amount the government allows you to borrow in its programs.

Private student loans are offered by private lenders, and there are no federal forms to complete.

Eligibility for private student loans often depends on the student's or cosigner's credit score.

It is better to apply for a private student loan with a cosigner even if the student could qualify for a loan on their own.

In order to receive a Private Student Loan, the student will need to complete an on­line application and promissory note.

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Lender List Information and Agreements

• The lenders and loan options presented in FASTChoice were selected for the excellent terms and benefits they provide to borrowers.
• To determine which lenders and loan options to display, Ohio Wesleyan sent a Request for Information (RFI) to 25 of the major lenders. Through this request process, lenders were asked about their services, borrower benefits, processing, etc. After receiving responses from these lenders, a committee at OWU (including student representation) reviewed the responses and scored the lenders. The lenders listed in FASTChoice represent those lenders Ohio Wesleyan views as exceptional choices for our students.
• All information provided on the Loan Options page is reviewed regularly to ensure the benefits that lenders offer continue to adhere to our criteria. Any loan options that no longer adhere to our criteria are removed, and new loan options that meet our criteria are added. At least three lenders will be presented to you at all times.
• We maintain professional relationships with all lenders. Our officials are prohibited from accepting financial or other benefits in exchange for displaying lenders and loan options in FASTChoice. These include: receiving compensation to serve on any lender board of directors or advisory boards; accepting gifts including trips, meals, and entertainment; allowing lenders to staff our institution's financial aid office; allowing lenders to place our institution's name or logo on any of their products; and owning lender stock (for those college officials who make loan decisions for our institution).

Read about OWU's Code of Conduct governing student loan practices.